Hack Next Year’s Budget

It is that time of year again. Budget time! As pastors, leaders, vestries, and boards are wringing their hands about the close of this year, plans for next year are being drawn up.

Over the years I developed a few ‘hacks’ for church leaders. I’ve collected a few of these tips, tricks, and rules of thumb that have proven useful to me and—I pray—would help you thrive in the last few months of the year.

Think Dates, Not Dollars

If budgets are tight or giving is down, or end of year forecasts are unclear, it is hard to think BIG about a new year. It is hard to talk and budget a BIG VISION when the numbers on the spreadsheet are running red.

That is usually when worry and anxiety start to set in. Pastors often get defensive about the spending plan they’d hoped to have. Boards and vestries may go on the offensive. “We need to see how we are going to end the year before we set the budget.” But both reactions are missing the most important thing about a budget.

I say this: don’t think about deficits and dollars…think about setting a few dates for the next year. Put your calculator away and get out your calendar because the most important question you can ask is this: How and when can I teach and tell the people of my church about the mission we have undertaken and how God can use them to accomplish it? Then search the months ahead and schedule four or five significant moments during the year when you can preach a sermon series, or a teaching series, make pastoral appointments, invite personal testimonies, attend small group discussions, or leadership training events to help your people understand the power of God’s mission and their role as his people.

It is tempting to ask the ‘How much” question during this time of year when the ink is red. But it is a red herring, as it were. Focus instead on how, when, and where you can build a culture of engagement and generosity with the plans of God for your people.

The “Double December” Approach to Budgeting

This hack might make some on the finance committee nervous, and it might involve a bit of research. But once it is tweaked for the local circumstances, it seldom will fail. And when you follow the logic and plan accordingly, you can avoid all kinds of worry and tension in future meetings.

Here it is: Since expenses usually are fixed across the year on a month by month basis, build your spreadsheet with that in mind. Take the anticipated expenses, divide by 12, and put 1/12 in each of the 12 months. Don’t worry about the details, the budget can be tweaked along the way.

Then, since income does NOT come in evenly, divide the total anticipated income for the coming year by 13 and spread 1/13 of that amount over the 12 months of the year. And then add one more 1/13th onto December. In other words, Double December.

Boom. You’re done.

Double Check your “Double December”

I hesitate to be so certain about the formula above because every church is different. And as always, your mileage may vary. But check it out for yourself.

If it works for you, then use it to set the parameters of your budget. And notice one thing that is so important. Most churches get a bit worried about their financial health during early Fall. Their leadership will often find many good reasons why the ink is running red: summer doldrums, lack of commitment, lack of attendance, and back to school expenses. These are all good and valid reasons. Perhaps.

But there is one more reason why ink is red. It is built into the way people give. Expenses are flowing out faster than income is flowing in. Why is this usually true?

Go to the next ‘hack.’

Some Dollars are Lazy

Expenses for a church are usually fixed. They are the outgoing resources and they are always on schedule. They are needed and they are obligated ahead of time. They make up payroll which occurs at regular intervals. They support missionaries who love to receive regular support. They pay for bills and supplies and the programs which occur on a schedule.

But incoming resources usually are more relaxed. They take their time. They are lazy, in a way. They go on a summer break. Some dollars lag behind because of attendance patterns. Sometimes they forget to go to church at all. And, if nobody calls about them, they might think they are not needed.

Do you see the point? It is human nature. Donated dollars are usually late. The Double December hack reminds us that these dollars will finally get there…but only if they are reminded…and probably toward the end of the year. And frankly, they often just need to be encouraged or reminded of their role in the church.

If the leader can lovingly and pastorally remind them of the role they have in the mission of the church, that usually will bring them in the door. They are known to come for Christmas Eve services.

Most Holes Contain Buried Treasure

As we have seen, many churches will go ‘into the hole’ about this time of year. If expenses go out on a 1/12/month rate and income comes in at only 1/13/month, you can see why growing deficits appear sometime after the summer.

But this is not necessarily a bad thing. Many holes contain buried treasure. I mean to say this: a church that is ‘in the hole’ is usually more focused, studied, intentional, and, frankly, more prayerful about things. Being ‘in the hole’ will usually cause the leadership to think carefully about the next year’s budget, communicate clearly to members, and call their people to pray and to give generously.

There’s really nothing sneaky about these hacks—they’ve probably been hiding in plain sight. As with so much of my thinking on giving, these hacks are about recognizing that you can’t isolate stewardship as ‘the money stuff’ that exists independently from the pastoral care of the church. Everything you do—yes, that includes budget meetings—is about calling people to fuller faith and a fuller understanding of how to follow Jesus.

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